All Forum Posts by: Sam Tang

Thanks for the reply Bill, appreciate it!

This will be my first steps into the ARM arena, so I'm fairly unfamiliar with what options I have to minimize my risk after the initial interest rate expires. If the condo stays unwarrantable, am I stuck with the only other option of refinancing with a portfolio lender? Can I refinance into another ARM if it looks like the rates might continue to climb? Just wondering if there are any other options out there to get creative.

Another question, does the amortization schedule restart with every new rate change (ie every year) and would that mean my interest payments will forever be front loaded until the end of the loan period if I don't refinance?

I'm looking around for a portfolio lender that will finance me for a non-warrantable condo and finally found one. The condo is in the $175-200k range. They offer a 10/1 ARM with a 30 year loan term at 4.25% with 25% down. What are some exit strategies I can consider for the ARM in case interest rates rise to unfavorable levels in the next 10 years?

Now, my primary goal is to buy and hold this property because it is in a great location with possibility of rail service being added within the 10 years to it (which I speculate will help the property appreciate). I don't think I will have any problem with equity requirements in the future. The property is also near a university so I should not have a problem having it rented to that crowd for cashflow.

Since the condo is non-warrantable, it will be harder to sell to the normal buyer. I would rather not put the extra cash flow towards the principal balance. How easy would it be to refinance out the ARM to another type of financing if rates trend upwards?

Thanks!

Sean Brennan Justin Silverio - Thanks for the quick replies guys! I'm making a offer on a property today but I was hoping to attend the one at the end of this month in Waltham. I'll PM both of you!

Hi all -

Does anyone have a real estate lawyer recommendation in the Boston area? I used one recommended to me by an agent last time and it was ok but found out there was something that came up with the title on my recent refi on the previous property, so while it wasn't too big a problem...it does not inspire my confidence to use him again.

On kind of a related note, I did see a BP exclusive offer for Rocket Lawyer and was wondering if anyone has used that before for closing? I did some research and it sounded like its more for drafting leases and it depends on your area's jurisdiction.

I'm currently putting in a offer to purchase with an inspection contingency (I think it was 7 or 10 days) and condo docs contingency. You could be required to put down a good faith deposit during the time prior to the p&s being signed if accepted by the seller.

as far as I know this is how its done in MA

I've been giving notice of a rent increase 3 months in advance and require a response in a months time. The increase in my case isn't usually a huge jump so its not a huge loss of potential income and I feel it gives both parties enough time to prepare. It usually works out well if people don't feel rushed.

definitely would have a new agreement signed.

Where I live, the lease cycle is dominated by the college school year on Sept 1st. June 1st is also a popular date but Sept 1st trumps it by a mile. I've found tenants off cycle and there is definitely less demand and I found I could not get top rent for my room.

I would think Sept 1st would be your best bet but it wouldn't hurt to check at a local real estate office to ask when it is best to rent.

It sounds like you want to clean the place up before renting but with people signing leases from Sept 1st to Aug 31st, I've seen cleaners come in after the move in date. Never even heard of painting a room after each tenant.. :)

Went to check the place out and sounds like I am out of luck as the current owner does not want to kick the current tenant out. (long term tenant with good history). So he is specifically marketing to an investor. I did speak to my lender and they told me my only option would be to refinance out of the investor loan after the tenant lease was up. With rates right now though its probably not worth it.

Its pretty standard to charge first/last/security in boston and I haven't come across tenants that had a problem with doing it. Like OP said it probably is the stigma for a given area.

But yea the boston area is tough, but sky's the limit for rent around here if your wallet is big enough. With some good old leverage in a good area you can get some good returns. The 2% rule definitely doesnt work for these prices but you can for sure find positive cash flow out there.

Is there a way to purchase a property with a FHA with intent to Owner Occupy even though there are tenants in the existing unit that had signed a lease with the previous owner until a given date after the property is closed on? My understanding is that a lease goes with the property so you can't terminate the lease upon the sale. So could I purchase the property with a FHA loan and put off living there until the tenant lease is up then move in?